Justice Dept. Suit Raises Prospect California Net Neutrality Law Interferes With TV/Internet Bundling

Jerry Brown GETTY - H 2016
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The Justice Department has indeed filed suit after California Gov. Jerry Brown on Sunday signed the country's strongest net neutrality bill. The complaint filed in the Eastern District of California — the conservative region of the state — alleges that SB-822 is preempted by federal law and therefore violates the Supremacy Clause of the United States Constitution.

That the Trump Administration is suing is no surprise given that one of the FCC's first moves under the leadership of Chairman Ajit Pai was to repeal the previous administration's "open Internet" rules preventing the blocking and throttling of content on the part of Internet service providers.

In the complaint, Justice Dept. lawyers recount the regulatory history of how the FCC briefly reclassified broadband from an "information service" to a "telecommunications service" subject to regulation under Title II of the Communications Act. When the FCC voted to back off on rules including a ban on paid prioritization via its "Restoring Internet Freedom" order, California lawmakers stepped up to fill the void.

Now seeking a declaratory judgment that California's net neutrality statute is invalid as well as an order preliminarily and permanently enjoining enforcement of the law, the complaint discusses how California went beyond prohibitions on blocking, throttling and paid prioritization to also attack a practice known as "zero-rating," whereby a telecom data provider like AT&T doesn't count the consumption of its owned content against an individual subscriber's data plan.

Perhaps more under the radar is discussion how prohibitions in the California law are extended to separate non-Internet services delivered over an ISP's last-mile transmission facilities.

"SB-822 does not define what services are prohibited by section 3102(a)," states the complaint. "[I]t may be referring to what are sometimes known as 'specialized services' (such as 'facilities-based VoIP offerings, heart monitors, or energy consumption sensors'), although the prohibition is so broad that it might even apply to a provider prioritizing its co-packaged pay-TV services." 

Does that mean cable TV providers will no longer be able to offer discounted bundling of Internet and television? That appears to be the implicit suggestion.

Here's the full complaint.